Tokyo: The Japanese benchmark Nikkei index fell to a 15-month low Monday, 19 November, as traders sold steel and trading house shares amid lingering concerns about the outlook for the US economy.
The Nikkei 225 average fell 112.05 points, or 0.74%, to close at 15,042.56 points on the Tokyo Stock Exchange. It was the Nikkei’s lowest close since July 2006.
Trading volumes may become increasingly thin this week, leaving the market vulnerable to speculators looking for quick profits ahead of the US. Thanksgiving holidays and a Japanese holiday Friday, traders said.
There are many uncertain factors to overcome before investors see the low valuation of Tokyo shares as a bargain hunting opportunity, said Teruhisa Ishikawa, investment information manager with Mizuho Investors Securities.
“The holiday shopping season is just starting this week, while the subprime loan issue is still very hard to fully digest at this point in time,” he said.
As more people buy gifts via the Internet these days, the first reliable U.S. consumption data for this year’s holiday season are unlikely to arrive until at least the middle of next week, Ishikawa said.
Among steelmakers, Nippon Steel lost 4.6% to 629 yen, and JFE Holdings shed 4.4% to 5,490 yen.
In trading house shares, Mitsui & Co. sagged 6.5% to 2,305 yen, while Marubeni declined 6.1% to 766 yen.
The Topix index of all Tokyo Stock Exchange First Section issues lost 1.02% to finish at 1,456.61. AP
Tokyo: Japanese shares pared gains but remained up on Monday, 19 November, buoyed by stronger bank shares and a weaker yen that took exporters such as Hitachi Ltd higher. But gains were limited by concern about the US economy and stocks.
Faced with a dearth of other strong factors, the Nikkei was taking its cue from the currency market, where the dollar, which had earlier hovered around 110.90 yen, had slipped to around 110.80 yen by late morning.
A recovery in US stocks after Friday’s wide price swings gave Tokyo investors the initial reassurance they needed to buy, but investors were eager to sell at the highs.
“But with concern lingering about long-term moves in U.S. stocks and the economy, there’s no real reason to buy Tokyo up too high,” said Yutaka Miura, senior technical analyst at Shinko Securities.
Banks rose on a combination of short-covering after recent selling and a report in the Nikkei business daily saying Japan’s banking regulator is exploring ways to allow banks to invest in non-financial firms operated through subsidiaries.
The report said the Financial Services Agency, was also considering loosening rules that would fully allow banks to trade commodities and commodity futures, with an eye on raising global competitiveness among Japanese banks through deregulation.
“This isn’t a bad factor for banks, but it also isn’t the sort of thing to set off strong buying,” said Takahiko Murai, general manager of equities at Nozomi Securities.
“Japan’s bureaucracy is really behind on this kind of thing, and you sort of have to ask why they’re doing this now. It’ll take quite some time and I myself doubt how much impact it would actually have on profits.”
The Nikkei ended morning trade up 0.3% at 15,197.912, a rise of 43.21 points, after earlier rising as high as 15,302.76. The broader Topix index was nearly flat, up just 0.01% at 1,471.76.
Market participants said the focus of afternoon trade is likely to remain the yen’s movements, with activity in other Asian markets also expected to become a factor.
As of 0230 GMT, the Nikkei was lagging other Asian stocks, with MSCI’s measure of other Asian Pacific stocks up 0.65%. Reuters